…Responds to needs in health, education and jobs
BLANTYRE, June 23, 2022—Net profit for Standard Bank Plc, listed on the Malawi Stock Exchange increased by 4 percent to MWK 24.8 billion for 2021, while the bank’s final dividend to be paid to shareholders is K8.7 billion or K37.07 per share, the bank said on Thursday during the annual general meeting in Blantyre.
The shareholders also approved the appointment of new directors to the board, notably seasoned marketer Gladson Kuyeri, accountant Ann Chirwa and Havard-university educated business strategist Patrick Mweheire.
In the bank’s annual report for financial year ended December 31, 2021 presented at its Annual General Meeting in Blantyre today, Standard Bank Chief Executive Phillip Madinga and Chairperson Ngeyi Kanyongolo acknowledge the challenging operating environment due to foreign currency shortages and the prolonged effects of the Covid-19 pandemic.
“The group continued to operate in a challenging operating environment as demand for foreign currency continued to outweigh supply. This has resulted in the Malawi Kwacha to depreciate and the expectation is for the Malawi Kwacha to depreciate further as we head into 2022. COVID-19 also continued to affect business which in turn impacted credit growth and transactability,” reads the CE and Chairperson’s joint report accompanying the Annual Report.
Despite the challenges, Standard Bank’s net profit grew to MWK24.8 billion, which is 4 percent higher than that of 2020 (MWK23.7 billion), shows the annual report.
It says the bank’s total revenue grew by 31% driven by growth on both net interest income and non-interest revenue. Its net interest income grew by 25% driven by an increase in loans and advances to customers and financial investments which both grew by 25% year on year.
“The growth of interest earning assets was driven by favorable yield rates as well as continued increase in demand for digital loans. Non-interest revenue grew by 41% above prior year driven growth in transaction volumes of fees and commissions,” reads the statement.
It notes that the bank’s trading revenue significantly grew year on year anchored by an increase in trading volumes.
COVID-19 continued to affect performance of the bank’s both non-interest and interest revenue.
The bank’s fees and commissions were negatively affected by a 40% reduction of fees on internet banking, mobile payments and other related services to cushion customers from the effects of on COVID-19. The pandemic also resulted in high credit write-offs due to growth of customer loans and advances
“The group will continue its efforts to recover previously written off loans as well as focus on prudent risk taking and management,” reads the report.
To respond to the pandemic, Standard Bank contributed over MWK112 million directly towards fighting Covid-19 through the Ministry of Health and Malawi’s three central hospitals.
“The second wave of COVID-19 had debilitating effects on Malawi’s healthcare and systems. The Ministry of Health and Central hospitals sought urgent assistance and Standard Bank Plc responded swiftly providing the much-needed resources. Donated items included oxygen cylinder refills, PPEs, N95 masks, gowns, face shields, gloves, and patient monitors. In addition, the bank also provided support to the Private Citizens Covid Response,” reads the statement.
Despite the difficult operating environment, Standard Bank has reaffirmed its commitment to partner the country in economic growth efforts through investments directed at health, education, and job creation.
It the Education sector, Standard Bank responded by providing bursaries worth K120 million to students in public universities and is helping to improve capacity and the learning by contributing towards infrastructure and ICT.
On job and wealth creation, Standard Bank partnered the UN Women and FARMSE to engage women in agriculture as well as young entrepreneurs as merchants of its transactional platform, UNAYO. The partnership with UN women engaged 455 farmers in Lilongwe, Mchinji and Mzimba, and resulted in an output of 43.2 metric tonnes of certified seed.
On the other hand, Unayo has connected over 70,000 customers to enable cash transfers to both rural and urban areas.
“With Unayo, the group plans to stretch its reach to the marginalised unbanked population. Unayo is a mobile wallet with vast ecosystem and partnership opportunities to bring everyone on the financial table,” reads the financial statement.
On the macro economy, Standard Bank says it expects GDP to recover with a growth forecast of 5.4 percent driven by rebounds in Manufacturing, Transportation and Storage, and Accommodation and Food sectors.
“The pressure on the exchange rate will likely continue on the back of weak foreign exchange supply. Upward pressures on inflation rate will likely remain in the first half largely driven by supply constraints,” reads the statement.